The cost of living is rising every day but making even the tiniest of savings every day can go a long way. Saving and properly managing money has to be a priority for parents, especially those with more than one child, as how you handle money will affect not only you but your kids too.
Instilling good financial habits in children from a young age and helping them to understand money’s value will be of huge benefit to your kids later in life. As parents, it is our job to explain saving, budgeting and future planning to them but it can be difficult to know where to start. Here are a few easy ways to kick-start their economic education.
Get a Piggy Bank
A classic piggy bank is a simple yet effective way of teaching kids to save. You can even make it a challenge – how quickly can they fill it to the brim? This is a great way of demonstrating that even little savings all add up and the more they save, the more money they will have in the end. When they manage to fill it up, encourage them to spend half on a reward and put the rest in a savings account, encouraging them to never stop saving but showing them that saving money is not without its rewards.
Discussing money with your kid is all very well, but try letting them take some responsibility themselves. Giving them a lunch allowance, for example, is an excellent introduction to budgeting. Your kids will also appreciate that you trust them with this and as a result will probably make a real effort to budget well.
If your kids are younger, a daily allowance might be a good way to start but as they get older and more accustomed to managing money, try increasing this to a weekly budget and being very firm that when the weekly allowance is done, it’s done (until the following week). Kids will have to set daily budgets for their food so as to not overspend early on and have to go hungry for the rest of the week (and for any parents of teenagers out there, you’ll know that this mistake won’t likely be repeated!)
Online shopping is increasing in popularity every day, with everything from food to clothes to technology available with the click of a button. If you’re savvy with your searching, you can even bag yourself a discount or two.
While small discounts of 15% might not seem like much, over time they can make a big difference in your family’s finances. Simply search for “coupon” or “voucher” and the name of the website you want to purchase from and chances are you’ll find something.
Not only can online shopping save you money, it can save you precious time as well as getting food or other goods delivered to your doorstep gives you time to check off one of the other hundreds of things on your to-do list.
Better £10 now than £100 later
I think every child loses something at school. Lost property is an inconvenience for parents and kids but also for schools. A simple a money-saving solution to this issue is to label EVERYTHING. There are plenty of easy to use and customisable name tags for kids out there – it might seem like an investment but spending £10 on labels could save you spending a lot more to replace uniform and lots of school are actually recommending labelling belongings.
Set an example
Children learn a lot from us – both from us actively teaching them but also from observing us. In a T. Rowe Price survey, 17% f parents claim to have no savings for retirement, emergencies, college or other financial goals. If you want your child to be a saver, be one yourself. Children will be influenced by their parents or guardians, even indirectly and including in terms of money management. It is crucial that we set our kids a good example.
Make long-term plans
When it comes to opening a savings account for your child, sooner is better and nowadays lots of banks have specific savings accounts for young people. Although initially there won’t be a huge amount of money in there, by setting aside £50 a month for your kid in 20 years time, when they come to leave home, they will have enough money to go to university, pay the deposit on a house or a flat or make some other significant purchase or investment. Planning for the long-term will ultimately make life easier than having a last-minute scrabble.